With over 5.4 million small business owners having to comply with Making Tax Digital Self-Assessment by April 2024, many people are now choosing to join the pilot to get a head start and avoid leaving it to the last minute. HMRC are adopting a phased rollout and will continue broadening the scope until everyone is onboard.
Customers that meet the following criteria can sign up for the MTD Income Tax pilot for 2021/2022.
To join the pilot, you must:
Be a UK resident.
Be already registered for Self-Assessment (SA).
Be up to date with the tax records (e.g. no outstanding tax liabilities).
Have submitted at least one SA Tax Return.
Have an Accounting Period that aligned exactly to the tax year (6/4/2021 to 5/4/2022)
Have not received a COVID support payment for the 21/22 tax year.
Have kept digital records of their income and expenses.
The same criteria will apply to the 2022 / 2023 tax year.
How it works
Customers must maintain electronic records of their Income and expenses in an MTD compatible App like Rhino. Customers then connect Rhino to the MTD Tax System – this is a one-off exercise and usually takes less than two minutes to complete this step.
Once connected, Rhino will retrieve your quarterly Obligation Dates (for Income Tax). To complete a quarterly submission, Rhino will summarise and update the MTD System with just a few clicks.
Invoicing and Payment Tracking
Create and send simple invoices in seconds.
Create multi-line invoices.
Store invoices created outside of Rhino.
Track customer invoice payments.
The Finance Dashboard summarises invoices by month.
Record your expenses as they are incurred.
Take a photo of the expense receipt.
Setup different Expense Types.
Use the Dashboard to view a summary of your Expenses.
The MTD Submission Process
Once you have recorded your transactions, you will need to do the following: –
Connect Rhino to the MTD System (Authentication Process)
Connecting the Rhino Small Business App to the MTD platform is a one-off exercise and will take approximately one minute to complete. This process grants the Rhino Small Business App the permission to update the MTD platform on your behalf thereby avoiding the need to log the HMRC Web Site.
Provide Quarterly Updates
Each time you go into the Income Tax Submission Process, the Rhino App will take a few seconds to download the latest set of ‘Income Tax Obligation Dates’ that have been made available by HMRC.
Submitting your Data to HMRC
Rhino will summarise the Income and Expense Data and submit a summary of this data to HMRC. Once submitted, the detailed transactions that are associated with the Submission are locked. This lock maintains an audit connecting the detailed transaction to the summary data that you submitted. You will be able to enter new Invoices and Expenses for a period that you have already submitted.
Finalise your Tax Affairs
You can use the Rhino app to declare that you have finalised your Income Tax Submission for the Year. This MTD Income process is currently voluntary but it does mean that you will no longer need to complete the online Self-Assessment Tax Return.
If you have not already registered an Account...
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